Flour Milling in the US Industry Market Research Report Now Available from IBISWorld

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Since flour mills provide goods that are considered diet staples, the industry will remain relevant in the years to come. Revenue and profit will depend on the price and production of wheat and rice, which are projected to be more stable in the five years to 2017 than during the past five years, but will grow at lower rates. As companies vertically integrate and merge operations in order to take advantage of economies of scale, consolidation is also anticipated to continue. For these reasons, industry research firm IBISWorld has added a report on the Flour Milling industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Stable input prices and the necessity of industry products will support revenue growth

Despite high volatility, the Flour Milling industry is expected to achieve strong revenue growth during the five years to 2012. Revenue is driven by the price of inputs such as wheat and rice because firms alter their prices based on changing input costs. “For example,” says IBISWorld industry analyst Olivia Tang, “drastic global weather conditions in 2011 limited world supplies of wheat and rice, creating a 42.0% price increase for wheat.” This jump in the price of a key input led mills to raise prices, boosting revenue 17.6% in 2011. Additionally, although people were wary of consuming carbohydrate-rich products due to its link with weight gain, positive media attention toward the health benefits of whole grains stimulated per capita flour consumption in 2011 and 2012. Also, during the recession, frugal consumers favored home-cooked meals over restaurant meals, shifting downstream markets toward grocery stores. As a result, revenue is anticipated to grow at an annualized rate of 7.5% to $20.9 billion during the five years to 2012.

In addition to successfully passing on higher input costs to downstream markets, firms cut costs by increasing their use of machinery to automate processes. This trend has caused the number of employees to fall during the five years to 2012. However, says Tang, “Because some smaller players lacked the capital to invest in cost-saving machinery, firms were forced to exit or merge with larger companies.” The three largest companies in the Flour Milling industry, Archer Daniels Midland Company, Cargill Inc. and ConAgra Foods Inc., account for about half of the industry’s revenue. The number of enterprises is estimated to fall at an average rate of 3.5% annually to 218 during the five years to 2012. Consolidation and lower wage costs helped profit expand over the five years to 2012.

During the five years to 2017, the Flour Milling industry will continue to grow. Per capita flour consumption is expected to remain stable because flour and rice products are considered staples of the American diet. Additionally, the price of wheat is projected to be less volatile in the next five years. As a result, revenue is forecast to climb during the five years to 2017. As companies vertically integrate and merge operations to lower costs, consolidation is anticipated to continue. For more information, visit IBISWorld’s Flour Milling in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in this industry participate in the following activities: milling grains and vegetables into flour; cleaning, polishing and milling rice; and producing malt from a variety of cereal grains. Industry operators purchase grain inputs such as wheat, corn, barley and rice from wholesalers or directly from growers. They then process them into flour, gluten, starch, and malt and sell such products to grocery wholesalers or other food-related industries.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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